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“We’re making sure that we’re efficient in all parts of our business and making sure we do understand what our customers’ changing needs are.”
experiences right across the business,” Mr Plant says. “We think digital is not just something that’s going to add a lot of value to our online capability for direct customers, but just as importantly across our affinity channels, corporate partners, our agency businesses and our broader intermediary relationships.” He says brokers are just as keen to use available information to ensure they are meeting the evolving needs of customers, both in terms of the delivery of insurance solutions and the evolution of insurance products. “We’re working jointly together to look at how we can bring insights to them and how we can utilise some of the insights they’ve created for us to provide a better set of solutions to their customers.” Analytics plays a big role in sifting through the vast amounts of data that insurance companies possess, and Mr Plant says that as a global insurance company dealing across multiple channels, QBE has “a huge amount of data on risk”. “There are some real opportunities to create insights out of that data, to also bring secondary and other data sets in there to complement our insights and really importantly have a very strong shift to driving customer analytics and understanding our customers better.” He says another advantage of being part of a larger insurance group is that much of the investment into analytics is being made at group level “to try and get the scalability and efficiency of a $14 billion company rather than four individual divisions”. As a global insurance company, QBE’s turnaround story is well under way and the local division continues to perform well. While gross written premium (GWP) in the Australia and New Zealand business may have fallen 14% in 2015 – from $US4.4 billion in 2014 to $US3.8 billion – the weak36
ened Australian dollar against the US dollar accounted for much of the drop, with GWP up 3% on a constant currency basis. Premium rates were down 2% in Australia and 7% in New Zealand, where Mr Plant says capacity in that market continues to recover following the Christchurch earthquakes, resulting in increased competition and pressure on rates. Its commercial portfolio grew by 5% for the year, which Mr Plant attributes to the strength of its broker relationships and an increased focus on customer retention. “We’ve got such strong relationships right across the board in our intermediary segment and those deep relationships have meant that we’ve continued to get a good showing of business,” he told Insurance News. “We’ve focused very heavily on the customer experience and the quality of the value that we’re adding to our intermediary partners and to their customers and I think we’ve seen an improvement in retention in most areas as a consequence of that as well.” For 2016, QBE Australia and New Zealand is forecasting another fall in premiums, to $US3.5 billion, which Mr Plant says is “reflective largely of expected GDP growth in the market”. “We’ve seen some sectors of the economy pulling back, so we’re being realistic as to what genuine new business growth is in the marketplace”. But he does not subscribe to the suggestion that the insurance industry is ripe for disruption. “I’d rather not be cynical on this,” he says. “I’ve been in the industry a while now and I’ve seen so much change. “The role that we play in society is incredibly important, and I actually see us responding really well to societal changes. “It’s easy to say that the world’s changing and that new customer preferinsuranceNEWS
April/May 2016
ences and experiences are changing, and that there’s a potential for disruptive forces coming through. “But I think the industry in the main is responding pretty well to those.” He cites the industry’s willingness to underwrite cyber insurance as an example. “As an industry I think it’s fair to say that none of us really truly understands where cyber exposures will evolve over the next five to seven years. “We can’t absolutely call our individual exposures, but as an industry I think we’ve responded well to be able to provide products. “A lot of this relates to the concept of taking intelligent risks. What are we prepared as individual insurers to underwrite, not only on an individual risk basis but to understand the accumulations of those sort of exposures and come up with products that try and meet the needs of what is an emerging risk profile for our customers as well?” He says that rather than worry about what competition might be emerging, either in the form of traditional competitors or “firms nibbling away at different parts of the value chain”, insurers should instead make sure they have their own houses in order. “We’re making sure that we’re efficient in all parts of our business and making sure we do understand what our customers’ changing needs are so we can… ensure we continue to provide really strong solutions.” He may not be upbeat about rates but Mr Plant is upbeat about the opportunity he has been given to guide QBE’s local operation. “I’m absolutely loving it. The privilege of running such a diverse operation, in excess of $5 billion worth of GWP across a range of distribution channels, the complexity that comes with that, is quite * exciting.”
